Top Stocks

By Don Dion, TheStreet

 

Here are five exchange-traded funds to keep an eye on this week.

 

1. iShares MSCI Japan Index Fund (EWJ)

 

The Japan-tracking EWJ spent much of the month of June treading water, subdued below its 50-day moving average. At the close of the month, however, the fund caught a break. Thanks to a three-day ascent during the middle of last week, shares of EWJ managed to recapture levels seen at the start of May.

 

In the coming days, as we take our first steps into the second half of 2011, it will be interesting to see if EWJ can capitalize on last week's strength. The Japanese markets still have ample ground to cover before the fund regains the highs witnessed before the devastating earthquake and tsunami. Along the road to recovery, expect headwinds to persist.

 

The Fourth of July holiday came early for the stock market last week as stocks exploded to their best weekly gain in many moons.

 

Powered by solid economic numbers and optimism for the forthcoming second-quarter earnings season, bulls pushed the S&P 500 to a gain of more than 5% for the week.

 

It is amazing watching the wall of worry crumble. The bear argument for a double dip or stock market armageddon never did hold much water. The three-month pause in the market was just that, a pause.

 

Despite the big gains, many stocks trade for relatively low valuations. As long as profits come in as forecast, we can expect more gains in July. It will be a tremendous summer rally if corporate earnings beat analyst estimates.

 

I’m staying long and strong with my ETFs to buy this week. Keep an eye on the iShares S&P North America Technology and Multimedia Fund (IGN).

 

 

 

This is one foreclosure that won't go Bank of America's (BAC) way.

Donald Trump is putting a huge squeeze on the bank as it tries to foreclose on a 24,000-square-foot estate in Virginia. Bank of America owns the house and is trying to sell it for $16 million, The Wall Street Journal reports.

Maybe the bank could sell a normal estate for that much, but not in this case. You see, Trump owns the backyard, the front yard and most of the driveway. He doesn't own the house itself, but he's willing to take it off the bank's hands for, oh, $3.6 million.

Ah, you gotta love the Donald. Here's how this nightmare for Bank of America came about: 

 

 

With the second quarter now finished, I'm gearing up for earnings season. While some folks shy away from trading stocks of companies set to release operating results, I use the opportunity to attack the market at its weakest and most inefficient point.

 

When a company reports results, the news will be greeted by overzealous buying or fearful selling almost immediately. The mad rush of buyers or sellers results in a stock that can move 5% to 10% higher or lower, depending on the company's success or failure at meeting Wall Street's expectations.

 

The beat-the-numbers game is alive and well. If you trade wisely, big profits can be had in a short period. The trick, of course, is to understand what is coming and position yourself accordingly.

 

I use several very effective tools to help guide my way to trading earnings successfully. On Monday, I gave a preview on 5 companies reporting earnings this week using these keys.

 

By Jason Notte, TheStreet

 

With pizza industry alumni using their dining and delivery experience to think outside the box, pizza has a rising political profile.

 

Two candidates in the field pursuing the Republican party's 2012 presidential nomination have long, stringy ties to the pizza industry and are just the latest pizza alumni to make their presence felt in American politics.

The pizza industry brought in $36 billion in 2009, the last full year for which complete statistics are available, and provides a nice resume item for candidates pushing for economic growth. But don't take the link too far. The industry declined 1% from 2008 to 2009 and has seen its share of struggles in the year and a half since, making relying on pizza for popularity at the polls look as dumb as calling it "'za."

 

By Gregg Greenberg, TheStreet 

 

Here are some of the dumbest actions in business this week.

 

5. Dougan's Dumbness

 

You wouldn't think someone as fiscally savvy as Credit Suisse (CS) CEO Brady Dougan would lose three-quarters of a million dollars because of a 12-day late divorce payment.

 

The Connecticut Supreme Court, the state's highest, ruled Monday that Dougan owes his ex-wife more than $750,000 in interest for being 12 days tardy with a $7.5 million divorce-related disbursement. Dougan argued he should owe interest only for the dozen days the payment was late and even threw in an extra $25,000, representing 12 days' worth of interest.  

 

People are trying to get ahead of the second half's annual rally in tech stocks, and I think they are way too early.

 

You shouldn't buy Broadcom (BRCM) or Intel (INTC) or any company in the Philadelphia Semiconductor Index right now. You have to wait to see the whites of their eyes, not just their eyes, and that won't happen until we get to late August.

 

Sure, you might want to take advantage of their underperformance and pick up some shares. But the ones you should pick up are the ones that are undervalued because their stocks are punk, not their earnings. That would be big data-center stocks, like IBM (IBM), EMC (EMC) and NetApp (NTAP), and you are seeing a big percentage gain in the latter. Or it would be cloud stocks, VMWare (VMW), Citrix Systems (CTXS) and Salesforce.com (CRM), although I would tell you that none of these are really down, per se.

 

The largest fast-food chains also have the worst food and service, according to a survey of Consumer Reports readers.

The magazine asked nearly 37,000 subscribers to rate 53 fast-food chains, and said the lowest marks went to McDonald's (MCD), Burger King, KFC and Taco Bell. All of those chains had uninspiring food and so-so service, Consumer Reports readers said.

"Chains like McDonald's and Taco Bell boast supersized values, but consumers don't necessarily think they offer much bang for the buck," an editor at Consumer Reports told Reuters.

Only 11% of subscribers said the food at those four chains was "excellent," but 15% to 19% described the food as fair, poor or very poor. McDonald's was last place in the hamburger category. 

By Robert Holmes, TheStreet

 

With stocks in a slump -- the benchmark S&P 500 ($INX) has fallen 5% from a peak two months ago -- individual investors are trying to figure out which companies may rebound because they offer value and which may continue their slide.

 

In this topsy-turvy world -- even hot-gadget maker Apple (AAPL) and defensive stalwart Exxon Mobil (XOM) are down -- emulating private-equity investors' approach to evaluating companies may be the smartest move.

 

Stocks are barely up so far in 2011 after two years of strong gains as higher commodity prices crimp corporate profits, consumer spending is lackluster amid high unemployment and the Federal Reserve is ending its second stimulus program this month. By focusing on corporate balance sheets and private-market valuations, investors may be able to navigate volatility in these summer months.

 

The first half of 2011 was all about high performance from the U.S. and developed economies, MSN Money columnist Jim Jubak says.  

By Don Dion, TheStreet

 

Once seemingly impervious to weakness, the commodities space has recently been cast under an unsettling shroud of uncertainty, leading many investors to question the long-term strength and attraction of hard assets.

 

Although in the near term, those looking for direct access to energy, minerals, and individual agricultural products may face an uphill climb, there are a number of ways ETF investors can actually benefit from the recent upheaval in commodities. Below are a handful of funds that look set to benefit as resource prices remain subdued.

 

SPDR S&P Retail ETF (XRT): Throughout the final months of 2010 and first quarter of 2011, cotton prices stuck to a steep upward path, as evidenced by the rise of the futures-tracking iPath Dow Jones UBS Cotton Subindex Total Return ETN (BAL).